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The falling cost of gift giving

The falling cost of gift giving

Posted on: 12/4/2018 | Author: ATB Financial's Economics + Research Team

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Yesterday in The Owl, we looked at how Albertans spend the second most in the country on items that make popular Christmas gifts: home electronics, clothes, and sports and books. Even though many of us might choke a bit at the sticker prices for these items, some of them are actually much less expensive than they were in the past.

The graph below shows price movements for three categories of consumer items: clothing and footwear, recreational equipment (including sporting goods, toys, games, home computers and digital cameras), and home entertainment equipment (including TVs and audio equipment). The data is expressed as an index, where consumer prices in October 1988 are set to 100.

Clothing and footwear prices have remained almost constant over the last 30 years. The price index in October of this year stood at 117.3, meaning prices are about 17 per cent higher today than they were the year Alberta hosted the Winter Olympic Games. For comparison, the all-item consumer price index in Alberta has more than doubled over that same period.

The real bargains are to be had with recreation and home entertainment equipment, the price indices of which stand at 43.7 and 44.1 respectively. Essentially, these items cost less than half what they did 30 years ago, thanks to the rise of low-cost Chinese manufacturing over the last three decades.

Retail prices, graph​​​​

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